Burrus v. Hbe Corp., ED 87786.

Decision Date24 October 2006
Docket NumberNo. ED 87786.,ED 87786.
Citation211 S.W.3d 613
PartiesWayne BURRUS, Appellant, v. HBE CORPORATION, Respondent.
CourtMissouri Court of Appeals

Jerome J. Dobson, Jonathan C. Berns, St. Louis, MO, for appellant.

Bradley Hiles, Randall Thompson, St. Louis, MO, for respondent.

KENNETH M. ROMINES, Judge.

Introduction

Appellant Wayne Burrus ("Burrus") appeals from the judgment of the Circuit Court of St. Louis County, the Honorable David Lee Vincent, III presiding, in which the court granted summary judgment in favor of Respondent HBE Corporation ("HBE"). For the reasons set forth below, we reverse and remand in part and affirm in part.

Factual and Procedural Background

The record below reveals that Burrus was an employee of HBE from 1989 until he was fired in 2001. Burrus was employed by HBE's hospital building division, and was one of the company's salesmen, working in its west coast territory. Burrus' primary job responsibility was to initiate and cultivate relationships with potential clients/customers seeking HBE's hospital design and building services. Because of the nature of Burrus' role as a salesman, he was only involved in the initial stage of the overall hospital design process: Burrus would establish the relationship with the customer, determine their initial specifications, and submit a proposal, internally called a "blue memo," to HBE's president and CEO, Fred Kummer ("Kummer") for review. If Kummer was interested in pursuing a relationship with the potential customer, other company personnel, including architects and engineers, would further develop the relationship. The relationship would ultimately be consummated when HBE and the customer signed a binding contract for HBE's services. However, Burrus' work with any prospective customer was generally complete when he submitted a "blue memo" to Kummer.

There is no dispute that Burrus was an at-will employee with HBE. However, Burrus was paid a commission, in addition to a base salary, for any hospital projects that came to fruition as a result of his work in establishing a customer relationship. The commission agreement was memorialized in a written Sales Compensation Plan ("Plan"), and applied to all of HBE's sales force. The Plan, although not the most thorough or well-crafted of legal documents, was rather simple and straightforward, and provided that a salesperson would be paid a specified percentage (ranging from .25% to 9/16%) of the final contract price for any design work HBE agreed to perform for a customer. The Plan was in effect when Burrus was fired.

The Plan also had two "Notes" that are relevant to the central issue in this case. The first note specifically defined a "contract" as: "a document executed by both parties and which legally binds both parties to its terms and conditions and which contain [sic] no contingencies of any kind. Money has been received and the contract must be clearly in the possession of HBE to be considered a binding contract for purposes of this commission plan." The second note provided that, "[a] salesperson must be in the employment of the Company at the time the commission is earned, otherwise no commission is due." The Plan had no other definitions or explanations.

Burrus was fired from his sales position in 2001, and he alleged in his petition that he had previously submitted six "blue memo" proposals that eventually resulted in binding contracts for HBE. Burrus further alleged that, but for his firing, these contracts would have generated substantial commissions for him. However, HBE never paid Burrus the commissions on these contracts, arguing that Note 2 of the Plan relieved it of any liability to pay these commissions because Burrus was not employed by HBE at the time the contracts were signed, notwithstanding the fact that the blue memos were submitted during his employment.

Following HBE's refusal to pay the disputed commissions, Burrus filed a three-count suit in the circuit court. In his first count, Burris alleged that HBE breached its employment contract by refusing to pay him commissions on the six "blue memos" he submitted before he was terminated, and which ultimately resulted in commission-generating contracts after his termination. Burrus' second count was a quantum meruit claim, and he argued that he was entitled to the reasonable value of the services he performed for HBE. Burrus' third count was a claim for damages under Missouri's "Merchandising Practices Sales Commissions" act, Section 407.912 RSMo. (2000). Shortly after Burrus filed his petition, HBE moved for summary judgment with respect to all three counts of Burrus' petition, and the trial court granted the motion.1 This appeal followed.

Standard of Review

As this case involves our review of the trial court's grant of summary judgment, we must consider the record in the light most favorable to the party against whom judgment was entered. ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Facts established by affidavit or other proof in support of a party's motion are taken as true unless contradicted by the non-moving party's response to the summary judgment motion. Id. We accord the non-moving party the benefit of all reasonable inferences from the record below. Id. The propriety of summary judgment is purely an issue of law, and thus, our review is de novo. Id. Summary judgment is appropriate where the moving party establishes that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Id. at 378.

Discussion

Burrus brings two claims of error. First, Burrus argues that the trial court erred in granting HBE's motion for summary judgment with respect to his breach of contract claim because a genuine issue of material fact existed regarding whether, under the Plan, Burrus earned the commissions at issue before he was terminated. Second, Burrus argues that the trial court erred in grating summary judgment with respect to his quantum meruit claim because a genuine issue of material fact existed regarding whether he could prove the elements of this claim. We agree with Burrus on the first point but disagree on the second.

I. Breach of Contract Claim

The central issue in Burrus' breach of contract claim is whether, under the Plan, he is entitled to the commissions at issue. This question will be answered by determining the meaning of the term "earned," as it is used in Note 2 of the Plan. HBE's primary argument is that this Court need look no further than the four corners of the Plan document in determining that no commissions are due, and specifically points to the plain language of Note 2, which states that "[a] salesperson must be in the employment of the Company at the time the commission is earned, otherwise no commission is due." HBE argues that, under a plain reading of Notes 1 and 2, a commission is "earned" only when a final contract is signed, and not before. Therefore, since Burrus was not employed by HBE when the contracts in question were signed, no commissions are due.

Conversely, Burrus argues that he earned the commissions at issue when he submitted the blue memos to Kummer, thus completing his portion of the work regarding the transactions at issue. Burrus further argues that since he would have had no further involvement in the client relationship after the submission of the blue memos even if he had been employed at the time the contracts were signed, the commissions were "earned" when his work was completed, not when the contracts were signed.2 Burrus points out that since the term "earned" is not defined in the Plan, it is ambiguous as it is used in Note 2. Burrus also suggests that HBE could have easily drafted the Plan to provide that a salesperson must be employed by the company at the time a contract is signed in order to earn a commission. Accordingly, Burrus argues that because HBE failed to do so, and his interpretation of the contract is a reasonable one, an ambiguity exists which should, at the very least, be deemed a material factual question precluding summary judgment. In the alternative, this ambiguity should be construed in his favor, given that HBE drafted the contract.

Although we agree with Burrus' position that the term "earned," as it is used in Note 2, is ambiguous, thus creating a genuine issue of material fact precluding a grant of summary judgment, we are not prepared to strictly construe the contract in favor of Burrus. Rather, the following specific factual question remains to be determined by the trier-of-fact: whether the Plan requires that a salesman be employed when a final contract is signed in order to "earn" a commission, or in the alternative, whether the Plan merely requires that a salesperson complete his portion of the work with a given customer (i.e., by submitting a blue memo), even though the final binding contract may not be signed until well after his employment has terminated.

As our starting point, we note that "[t]he cardinal rule in the interpretation of a contract is to ascertain the intention of the parties and to give effect to that intention." J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d 261, 264 (Mo. banc 1973). If a contract contains no ambiguities, then the intent of the parties is to be gathered from the contract alone. Id. Therefore, a court will not "resort to construction where the intent of the parties is expressed in clear and unambiguous language...." Id. However, where the contract is ambiguous and unclear, a court may resort to extrinsic evidence to resolve an ambiguity. Id. A contract is ambiguous when "it is reasonably susceptible ... [to] different constructions." Id. However, a contract is not rendered ambiguous "by the fact that the parties do not agree upon the proper construction to be given it." Id. In determining whether a contract term calls for construction, we must consider the entire...

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